Contracts
A real estate purchase contract that contains a contingency for the buyer to sell their current home is known as a:
ARight of first refusal
BSale contingency✓ Correct
CKick-out clause
DOption contract
Explanation
A sale contingency (home sale contingency) makes the purchase of a new home contingent upon the buyer successfully selling their existing property. This protects the buyer from owning two homes simultaneously but may make their offer less attractive to sellers.
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Key Terms to Know
Contingency
A condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Right of First RefusalA contractual right giving a party the opportunity to match any offer received before the owner can accept it from a third party.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
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